Archive for December, 2005

"Sure, I can. And suddenly, there was with the angel a multitude of the heavenly host praising God, and saying, ‘Glory to God in the Highest, and on Earth peace, and goodwill toward men,’ " Linus says.

I’m just saying "hmmm." When a $120 billion company with a P/E near 100 continues flying on both good news and bad, something’s just not right.

Normally, I’d agree wholeheartedly.

But not in this case.

What Seth is missing is that GOOG (and everyone else in online advertising) is not reacting to either good or bad news but, rather, performance… performance being driven by the one of the biggest — and most obvious — transitions from traditional-to-digital.

With $400-$600 billion out for grabs, Google, Yahoo, and the MSN division will be $20 billion entities before anyone (including Seth) knows it.

P.S. Kinda the same thing as Apple is going through — is AAPL ridiculously over-priced or did Apple just figure out how to distribute copyrighted material in a digital world and is part of a much bigger movement?

Cody Acree, an analyst with Stifel Nicolaus, said that Intel’s problem stems from its inability to produce enough computer chips to meet demand.

"They are capacity constrained so that there’s not much ability to ship more than they’ve already shipped," Acree said, adding that the company’s strong third quarter probably took some business from the fourth quarter.

See the error?

INTC is getting whacked for selling 100% of what it’s making.

Usually, that’s a pretty good thing.

My conclusion: AMD isn’t gaining marketshare per se, rather, the market is growing faster than anyone guessed and vendors are turning to secondary suppliers like AMD.

I want to hammer INTC for bad capacity planning but it wasn’t so long ago that they were battling inventory issues. No doubt, there’s a "feast or famine" factor here.

Bottomline: Demand that catches everyone by surprise is good news for overall tech investing.

My telltale question: Is AMD is selling 100% of what it is making?

Not that I’ve heard.

Which means when INTC brings on more capacity, the pie will return to normal — and that will be good news for INTC investing, too.

"But Internet advertising accounts for less than 10% of all advertising sales now. That percentage will be going to 20% in the next few years and will eventually hit 50% and more in the decades to come."

20% means an online market potential of $80-$120 billion before the end of the decade… with the lion share going to Google, Yahoo, and MSN.

That’s why Google and Yahoo are going to be at least $20 billion companies before anyone knows it… and why Microsoft just jumped into the online ad game with both feet.